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Toward a low carbon growth in Mexico : is a double dividend possible ? A dynamic general equilibrium assessment

Author

Listed:
  • Mauro Napoletano

    (OFCE Sciences Po Skema Busibess School)

  • Andrea Roventini

    (OFCE-SciencesPo & Skema Business School)

  • Jean Luc Gaffard

    (OFCE Sciences Po & Skema Business School)

Abstract

We build an agent-based model populated by households with heterogenous and time-varying nancial conditions in order to study how scal multipliers can change over the business cycle and are a ected by the state of credit markets. We nd that deficit-spending scal policy dampens the e ect of bankruptcy shocks and lowers their persistence. Moreover, the size and dynamics of government spending multipli- ers are related to the degree and persistence of credit rationing in the economy. On the contrary, in presence of balanced-budget rules, output permanently falls below pre-shock levels and the ensuing multipliers fall below one and are much lower than the ones emerging from the deficit-spending policy. Finally, we show that di erent conditions in the credit market significantly a ect the size and the evolution of fiscal multipliers

Suggested Citation

  • Mauro Napoletano & Andrea Roventini & Jean Luc Gaffard, 2015. "Toward a low carbon growth in Mexico : is a double dividend possible ? A dynamic general equilibrium assessment," Documents de Travail de l'OFCE 2015-25, Observatoire Francais des Conjonctures Economiques (OFCE).
  • Handle: RePEc:fce:doctra:1525
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    File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2015-25.pdf
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